BT is cutting 13,000 managerial and back-office jobs and leaving its London HQ in a bid to cut costs.

The British telecoms giant is struggling after an accounting scandal and a downturn in trading.

The measures will save £1.5 billion in costs in three years and cost £800 million to implement.

LONDON (Reuters) — BT is cutting 13,000 managerial and back-office jobs and leaving its London headquarters in the latest attempt by Britain's biggest telecoms group to rebuild after an accounting scandal and downturn in trading.

Chief Executive Gavin Patterson sought to keep shareholders on side by maintaining its dividend and agreeing a new pension funding plan as part of an attempt to modernize the former state-owned telecoms monopoly.

Patterson, in the role since 2013, said the restructuring, which comes after a tough 2017, would focus on the essential services needed by consumers and businesses.

BT, which owns Britain's biggest mobile operator EE, said it would hire about 6,000 new engineers and front-line customer service staff to support its rollout of fiber and 5G networks.

"This position of strength will enable us to build on the disciplined delivery and risk reduction of the last financial year, a period during which we delivered overall in-line with our financial and operational commitments whilst addressing many uncertainties," he said on Thursday.

The job cuts, the highest number by the former monopoly since 2008, will save £1.5 billion in costs in three years, the company said. The restructuring will cost £800 million to implement.

BT also agreed a new 13-year funding plan for its pension, which had a deficit of £11.3 billion at the end of June. It will pay £2.1 billion into the scheme by 2020 and a further £2 billion will be funded by the issuance of bonds.

The strategy comes after the group reported a 3% drop in fourth-quarter revenue to £5.96 billion, just missing analysts' expectations, while core earnings came in at £2.08 billion pounds, up 1%.

BT said its outlook for the current financial year, to end-March, would see a 2% drop in underlying revenue, while adjusted core earnings would be in the range £7.3 billion-£7.4 billion, down from £7.5 billion in the last year.